Your Down Payment

Lots of folks who would like to purchase a new home can easily qualify for several different kinds of mortgages, but they don't have a lot of money to pay a down payment. We have a few suggestions

Slash the budget and build up savings. Scrutinize your budget to uncover ways you can cut expenses to save for your down payment. You could also try enrolling in an automatic savings plan to have a percentage of your payroll automatically moved into savings. Some practical strategies to put together funds include moving into less expensive housing, and staying local for your vacation for a year or two.

Work more and sell items you do not need. Perhaps you can get a second job to get your down payment money. In addition, you can make a comprehensive inventory of items you can sell. Unused gold jewelry can be sold at local jewelry stores. You might have desirable items you can sell on an online auction, or quality household items for a tag or garage sale. Also, you can consider selling any investments you own.

Borrow from retirement funds. Research the details for your individual plan. You can take out money from a 401(k) plan for a down payment or make a withdrawal from an Individual Retirement Account. Make sure you comprehend the tax ramifications, repayment terms, and penalties for withdrawing early.

Ask for help from members of your family. Many buyers somtimes receive down payment help from gracious family members who are willing to help them get into their own home. Your family members may be inclined to help you reach the goal of owning your first home.

Contact housing finance agencies. Special mortgage programs are given to buyers in certain circumstances, like low income homebuyers or people planning to improve homes in a targeted place, among others. Financing through a housing finance agency, you may be given an interest rate that is below market, down payment help and other advantages. Housing finance agencies can assist you with a reduced interest rate, help with your down payment, and provide other assistance. These non-profit agencies were established to promote community in specific neighborhoods.

Learn about low-down and no-down mortgage loans.

• FHA loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in helping low to moderate-income buyers get mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in getting mortgages. FHA helps first-time buyers and others who would not be eligible for a traditional mortgage on their own, by offering mortgage insurance to the lenders. Down payment amounts for FHA loans are lower than those of conventional mortgage loans, although these loans come with average rates of interest. The required down payment can go as low as three percent while the closing costs may be covered by the mortgage.

• VA mortgages

  With a guarantee from the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This specialized loan requires no down payment, has limited closing costs, and provides a competitive rate of interest. While the mortgages aren't actually provided by the VA, the office certifies applicants by issuing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close at the same time as the first. Most of the time, the piggyback loan takes care of 10 percent of the purchase amount, while the first mortgage finances 80 percent. The homebuyer covers the remaining 10%, rather than having to put together the typical 20% down payment.

• Carry-Back loans

  In a "carry back" agreement, the seller commits to lend you part of his home equity to help you get your down payment funds. The buyer finances most of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Usually you'll pay a somewhat higher interest rate with the loan financed by the seller.

Want to discuss down payments? Call us at 818-999-6444.